Protecting our savings

Screensaver

Hi Newbie here.
We seem to be getting squeezed as to where we can protect our savings from the tax man. I am aware of the tax protection an ISA offers, but with the proposed changes to the ISA threshold  looming, Where are you savvy savers putting your savings ? ( Interest above £1000 in banks and building societies attracts interest .
Thanks in advance.

jimjames

There are no proposed changes to ISAs. I'm still using ISAs and have no plans to change that until anything else is announced but also use my pension to save tax.

Stubod

..what changes are you referring to??

singhini

Screensaver said:

Hi Newbie here.
We seem to be getting squeezed as to where we can protect our savings from the tax man. I am aware of the tax protection an ISA offers, but with the proposed changes to the ISA threshold  looming, Where are you savvy savers putting your savings ? ( Interest above £1000 in banks and building societies attracts interest .
Thanks in advance.

i wasn't aware of any proposed changes to the threshold, only changes to the 18+ age limit (which have happened already) age https://www.aldermore.co.uk/insights/savers/changes-to-isa-rules-what-does-it-mean-for-me/#:~:text=New 18+ age limit for all adult ISAs&text=From the 2024/25 tax,save into a Junior ISA.

What did you hear/read regarding the threshold? 

[I'm the same as jimjames, i use ISA's and my pension as a way to shield against taxation].

LHW99

There's always premium bonds

Bigwheels1111

Why are you panicking.
How much interest are you talking about. What is your income.
All factor in to your allowance.

I earn over 10k in interest a year.
As a low earner, 4.3k a year.
I have £14,270 of interest to play with before I pay a penny in tax.

If I get the new job I’m after I will owe the tax man 2.5k from next years interest.
Plus pat tax on every penny I earn, it kills me to think about it.

Newbie_John

Withdrawing cash and keeping under the bed would be interest tax free! And also interest free..

eskbanker

Screensaver said:

Interest above £1000 in banks and building societies attracts interest

Interest above (or below) £1000 is interest!

You presumably meant to say that interest above £1000 attracts tax but even that isn't necessarily true, as dependent on other income there may be no tax at all, or there may be tax payable from a lower threshold, even £0....

Screensaver said:

with the proposed changes to the ISA threshold  looming, Where are you savvy savers putting your savings ?

Savvy savers on here aren't taking any premature actions based on rumours!

Kim_13

If the Cash ISA threshold is dropped from £20,000 to £4,000 (though I can’t see it going any further than 50% Cash, 50% S&S to be honest) it will be announced on March 26, giving 10 days to max out 2024/25’s allowance before it is lost. So unless you are already paying tax on interest or can get a higher rate in an ISA (it occasionally happens that way) it makes no sense to put money into an ISA already. Though it may make sense to open one with a small amount that will still allow contributions at that time, as if there is a rush and you don’t have one open it may be that you can’t get the money in quickly enough to count for 24/25.

No changes will be made for 24/25: applying a lower limit for everyone would mean a number of savers being in breach of the rules that they were in compliance with at the point of paying in. It would be an administrative nightmare to apply different rules to contributions made from March 27, and not worth any Chancellor bothering with for the sake of little more than a week.

InvesterJones

It's usually best to aim for the best return (for your given risk appetite) rather than lowest tax - the two are not always the same, especially for the basic rate tax band. Have you asked what your savings are being held for? It could be that there are better returns available via pension or investments if the time frame for accessing them is very long.

wmb194

Low coupon gilts are an option. Coupons are taxed as interest as normal but capital gains are exempt from CGT. If you search this forum you'll find some threads on them. 

https://www.yieldgimp.com/